Assigned to FICO FOR COMMITTEE
ARIZONA STATE SENATE
Fifty-Sixth Legislature, Second Regular Session
REVISED
FACT SHEET FOR S.B. 1495
personal property exemption; increase
Purpose
Effective January 1, 2025, increases the business personal property tax exemption to
$500,000.
Background
Personal property is classified and valued by each county assessor, except for centrally
assessed personal property, which is valued by the Arizona Department of Revenue (ADOR). After
the county assessor values locally assessed personal property, it is placed on the personal property
tax roll. Locally assessed personal property, except manufactured housing or mobile homes, is
assessed based on the property's full cash value (A.R.S. §§ 42-13304; 42-15053; and 42-19002).
The Arizona Constitution grants the Legislature the authority to determine by law the
qualifications for, and the amount of, a property tax exemption for personal property used in trade
or business or for agricultural purposes. Current statute exempts up to $207,366 of specified
personal property used in trade or business or for agricultural purposes from property tax. The
exemption is commonly referred to as the business personal property tax exemption. ADOR
annually adjusts the exemption amount for the following tax year to account for inflation. For TY
2023, the exemption is $225,572. The amount of personal property that exceeds the exemption
amount is subject to an assessment ratio of 15 percent (Ariz. Const. art. 9, § 2; A.R.S. §§ 42-11127
and 42-15002).
Each person that owns or has control of taxable personal property must deliver a correct
report of property to the county assessor by April 1. The self-report is used to identify taxable
personal property. Certain personal property used in trade or business or for agricultural purposes
is exempt from the requirement to provide a property report (A.R.S. § 42-15053).
The Joint Legislative Budget Committee fiscal note estimates a state General Fund cost of
$5,300,000 beginning in FY 2026. The cost would be offset by savings attributable to the
automatic school tax rate adjustments under the state's truth-in-taxation provisions, resulting in an
FY 2026 cost of $1,600,000 (JLBC fiscal note).
Provisions
1. Increases the business personal property tax exemption to $500,000.
2. Becomes effective on January 1, 2025.
FACT SHEET – Revised
S.B. 1495
Page 2
Revisions
• Updates the fiscal impact statement.
Prepared by Senate Research
February 6, 2024
MG/cs